All Forum Posts by: Mark Ostertag

How does an eviction work with a turnkey property? 

I would be all for turnkey properties since I don't have a lot of time to put into them - busy work and family - but what scares me is how to handle those situations from states away. I'm okay with a little less return since I still believe real estate to be safer than the stock and a wise diversification option.

What do you handle versus the property manager in terms of repairs, finances, screening, & evictions?

I poked around a bit on the forums and I'm sure these questions are answered somewhere but I haven't found them yet...

@Deb Munchel

First house

I’m hoping people would overlook the small bathroom, but wondering if that’s too optimistic?

Third house

I think they would allow me to see the house when we get further along in negotiations, but I’m not sure how to go farther in negotiations without seeing it... maybe I need to chat with them more or just get it under contract pending an inspection?

BP,

I’ve been reading and researching a ton (for years) and the finances are finally in place to pull the trigger. Now I’m having difficulty picking which house - please provide your experienced thoughts!

Do the little items I mentioned make a big difference or will they all rent to somebody so don’t worry about it? I want to ensure quality long term tenants, low vacancy, and higher rents (hopefully leading to better quality tenants).

All houses 3bd,1ba. In the same village. And all askings seem high to me ha (maybe I’m optimistic!)

First house

Asking $115k

1000 sq ft. Good neighborhood, outside is simple but good, No garage, paved driveway, small yard front and back. Next to a 6 unit with doors that open next to the driveway, not preferred but whatever. Inside and rooms look great, Pinterest finishes, granite countertops, looks impressive. Basement is clean, if musty, good for storage easy access. Loved it up to this point.

Concern: bathroom is epic small. Toilet is so close to the tub that overweight or tall folks would have issues with it. The sink isn’t far from the shower wall either. Those who have seen and I don’t know of any good way to rearrange this unless we skip the tub and install a shower, but then I lose families with kids as potentials.

Deal breaker?

Second house

Asking $110k

1232 sq ft. Right next to the dumpy street in the village, but the whole village is fine. Surrounded by commercial on three sides. Short walk to village library, post office, great restaurants, etc. driveway is gravel and has grass growing in the middle. Rusty shed in the small fenced in backyard. First floor laundry, mud room, outdated kitchen without dish washer or spot for microwave (maybe fixable). Carpets throughout living areas. Bathroom is spacious and tiled, old windows throughout the house, molding etc all speaks of lower quality home. Basement and attic both have super steep stairs and I would recommend anyone use them.

Concern: I can’t decide if being near commercial area is good or bad and I’m concerned that the dumpy area nearby will attract similar renters? No dishwasher and microwave sound like a negative for renters (maybe I can add them).

Third house

Asking $130k

1512 sq ft. A church friend owns this and it isn’t on the market. They are savvy though and are asking a bit high. It is currently occupied and cashflowing. I don’t know anymore than what they’ve told me because they don’t want to disturb the tenant. Pictures from when they rented it make it look somewhere in between the first two houses in quality, but it is more sq ft. Owner will replace the roof prior to selling. I’m trying to carefully discuss and negotiate with them as I’m learning and see an opportunity here.

Concern: I haven’t seen much here of the house and so I don’t feel I can make a good offer without knowing the condition beyond their word of mouth? While immediate cash flow is a plus, I’m not sure how to ask the appropriate questions of the seller to vet the tenant they vetted. Seems easy to be rude? The last thing I want to do is take over the house and then have to evict them...

(P.S. if you’ve read this far, sorry for the long post! Just trying to explain the variables.)

@Youssef Elmaraghy

If I didn’t have a family, I would be house hacking living in a duplex, triplex, or fourplex. That would absolutely be my first purchase. Put your own housing costs to work.

Just found this link which also has more information:

https://www.ffreia.com/Page.aspx?ID=Rent-Control-Across-New-York-State

I'm also interested in knowing who are good property managers in Rochester, NY!

Hello Biggerpockets!

The legislation proposed in New York passed on Friday 6/14. The two below articles have related information and I have some related questions. Please add other related

https://www.jacobinmag.com/2019/06/new-york-housing-tenants-universal-rent-control

https://ny.curbed.com/2019/6/14/18679507/rent-regulation-new-york-state-reform-legislation-passed

I'm in Rochester, NY and looking to invest locally where I can oversee my properties with a reasonable drive.

Does this primarily impact only unethical landlords? As in, if you're following the generally touted advice that I hear (take good care of your property and tenants, screen tenants thoroughly, evict for non-payment quickly, run it like a business), will this impact you?

Should I now wait to invest to see how this legislation impacts others? (I'm thinking not, but this certainly makes me nervous.)

Based on the legislation, can we still evict for non-payment, abuse of the property, or illegal activity in a reasonable period of time? (I saw a note about a judging staying an eviction for up to a year for certain reasons - highly alarming.)

What parts of this are in effect in Rochester? (I've seen posts indicating that this impacts NYC now and only other parts of the state if they elect to adopt it.)

I realize we may not have these answers yet, but I'd like to get the conversation started.

How bad is this actually? I'm sure it's not good, but does it make investing here a bad idea altogether?

I am in Rochester and starting out investing myself. While I want to have my eyes wide open, I don't want to be discouraged from entering the business altogether because it is a little less advantageous.

I did a bit of reading yesterday and found this article right here on biggerpockets. I'm sure the article is rather optimistic, but the system does sound manageable? I'm interested in Buy & Hold, which the article seems to be interested in anyway.
https://www.biggerpockets.com/blog/rent-controlled-properties

Very impressive!

Disclaimer: I'm waiting hear back on an offer for my first owner occupied investment property, so I'm coming in with little experience. I'm also going to be operating in Western NY. However, my understanding is this:

In a month to month lease, if you have ANY problems with the tenant, you can give them a 30 day notice (to take effect upon the 1st of the following month) that you will not be renewing their lease. Do not deviate from this language and when you go to court, continue with the same sentiment. The judge will likely side with you because it is contractual and you have no obligation to keep them in your unit. During this conversation, the judge may find out that the tenant owes you back rent, or they smashed a window, don't keep the place clean, have a pet they're not allowed to have, or whatever problem it is that you don't like. But, THAT is not what you're in court for - you're simply not renewing the lease, as is your right to do so. If you open the can of worms about any of those problems, then the judge has to try to FIX those problems... things that you don't want to work out with the tenant, you just want them to leave, so you can get a new tenant who doesn't have these problems. If you stick to your guns about how you're simply not renewing the lease, there is no disagreement, you're just not renewing.

Theoretically, the same logic would apply to an annual lease, except you have to wait a whole lot longer to not renew the lease. If you have issues in month 3, you still have 9 months to go before you can not renew a lease. That means, if you want the tenant out right now, that you have to take them to court for the specific issue that you're having with the tenant, and the judge will do their best to judge correct the issue (this undoubtedly will take longer and may or may not work in compared to the tenant just leaving).

One last item, I'm told that the only reason that apartment complexes use annual leases is because they need to show reliable steady income when applying to the bank for loans. If they didn't have to deal with banks, then apartment complexes would likely be operating on month to month is the theory. Also, if somebody wants to leave your unit, early or not, they're probably just going to do it and you may or may not get your money out of them as per the agreed contract.

This is what I've been taught by other real estate investors and I have to side with their logic when compared to the annual lease, just based on the discussion. I'd love to hear more from other investors on here as to whether my understanding is accurate or not. Hope this helps!